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USDA's Rural Housing Loan Options The USDA direct loan is meant for very low-income families and is not available through this site or from any lender. The primary difference between USDA direct loans and USDA guaranteed loans is who funds the actual loan. With the USDA direct loan, the USDA acts as the lender.
The Section 502 Guaranteed Loan Program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas.
The USDA doesn't have a fixed credit score requirement, but most lenders offering USDA-guaranteed mortgages require a score of at least 640, and 640 is the minimum credit score you'll need to qualify for automatic approval through the USDA's automated loan underwriting system.
A USDA direct loan \u2014 also known as the Section 502 Direct Loan Program \u2014 is a mortgage made straight from the USDA. This home loan program is for low- to very-low income borrowers who wouldn't qualify for an affordable mortgage from other sources and otherwise wouldn't have access to quality housing in rural areas.
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